One eyewitness said a man got out of a car and began shooting “with a Kalashnikov”, hitting a policeman.

The police union said the officer was killed in car while stopped at a red light with the attacker driving by.

Witness Chelloug, a kitchen assistant, told Reuters: “I came out of the Sephora shop and I was walking along the pavement where an Audi 80 was parked. A man got out and opened fire with a kalashnikov on a policeman.

“The policeman fell down. I heard six shots, I was afraid. I have a two year-old girl and I thought I was going to die… He shot straight at the police officer.”

French interior ministry spokesman Pierre-Henry Brandet said: “An automatic weapon was used against police, a weapon of war.

Mr Brandet said the shooting started shortly after 9pm local time when a car stopped alongside a stationary police car.

He said: “A man immediately got out and opened fire on the police car, fatally wounding a police officer … He also wounded a second one, it would seem very seriously.”

Mr Brandet added the “terrorist threat” in France remains high.

President Francois Hollande said: “We are convinced of one thing. The potential leads that will lead us to the truth are of a terrorist nature.

“The counter terrorism division of the public prosecutors office has been mobilised and an investigation will be carried out.

“We will be extremely cautious, extremely careful, especially as this is an election period.”

He will hold a security cabinet meeting on Friday morning.

Mr Hollande added: “We all need to realise that our security forces, our law enforcement forces are targeted. They are doing tremendous work and they have the full support of the nation.

“This is a message for everyone. You will be protected. All the measures that could have been taken, have been taken.

“I am deeply sad tonight and I would like to express my heartfelt condolences for the policeman who was gunned down for his family.

“I would like to say that we do everything we can to counter terrorism.”

Mr Hollande said security sources will be of the utmost vigilance during the election as a result of the shooting.

French Interior Minister, Matthias Fekl, took to Twitter to pay tribute to the killed policeman and those wounded in the attack.

He wrote: “Tributes to the killed policeman and injured police officers, thoughts are with the relatives. In the face of terrorism, the nation is united with the law enforcement.”

Police warned people to avoid the area with residents evacuated from nearby buildings as the investigation got underway.

French TV channel BFM broadcast footage of the Arc de Triomphe monument and top half of the Champs Elysees packed with police vans, lights flashing and heavily armed police shutting the area down after what was described by one journalist as a major exchange of fire near a Marks and Spencers store.

Mr Brandet said police officers were deliberately targeted in the Paris Champs Elysees avenue shooting, but it is too early to say what the motive was.

Police sources had said earlier that the shooting could have been an attempt at an armed robbery.

The Paris prosecutor’s office says the counter-terrorism office has opened an investigation into the shooting.

Local media reported gunfire shortly after 9pm local time in the French capital.

A helicopter has been seen flying low over the city in the wake of the shooting.

Meanwhile Anne Hidalgo, the Mayor of Paris, has also spoken out about the attack.

She tweeted: “Tonight, a terrorist blinded by hatred and death, has ended the life of a police officer and injured two of his colleagues.

“I extend my condolences to the family and relatives of the police officer who was killed in the line of duty.

“I also wish a speedy recovery to his two colleagues and a tourist who was injured.

“I salute the dedication, bravery and professionalism of the police and rescue forces.

“We won’t give in, and remain United in the face of this odious and insidious threat that weighs on our cities.”

The entire area, a haven for tourists, is on lockdown as armed police secure the Champs Elysees.

The UK Foreign Office said: “The British Embassy is in contact with local authorities and urgently seeking further information following reports of a shooting incident on the Champs-Elysees in Paris.

“You should remain vigilant and follow the advice of the local security authorities and/or your tour operator.

“If you’re in the area and it is safe to do so, contact your friends and family to tell them you are safe.”

Local metro stations have been shut down as police hunt the second attacker.